WAY

Image source: The Motley Fool. Wednesday, July 29, 2026 at 4:30 p.m. ET Head of Investor Relations - Edward Parker Chief Executive Officer - Matthew Hawkins Chief Financial Officer - Steven Oreskovich Need a quote from a Motley Fool analyst? Email [email protected] Operator: Good day, and thank you for standing by. Welcome to the Waystar Second Quarter 2026 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Edward Parker, Head of Investor Relations. Please go ahead. Edward Parker Thank you, operator. Good afternoon, everyone, and thank you for joining Waystar's Second Quarter 2026 Earnings Call. Joining me today are Matt Hawkins, Waystar's Chief Executive Officer; and Steven Oreskovich, Waystar's Chief Financial Officer. This afternoon, we issued a press release announcing our financial results and published an accompanying presentation deck. You can find these materials at investors.waystar.com. Before we begin, I would like to remind you that this call contains forward-looking statements, which are predictions or beliefs about future events or performance. Examples of these statements include expectations of future financial results, growth and margins. These statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed in these statements. For a full discussion of the risks and other factors that may impact these forward-looking statements, please refer to this afternoon's press release and the reports we file with the SEC, all of which are available on the Investor Relations page of our website. Any forward-looking statements made on this call are only as of today and will not be updated unless required by law. We will also discuss certain non-GAAP financial measures. These measures are intended to provide additional insight into our performance and should not be considered in isolation or as a substitute for financial information prepared in accordance with GAAP. We have provided reconciliations of the non-GAAP financial measures included in our remarks to the most directly comparable GAAP measures, together with explanations of these measures in the appendix of the presentation slide deck and our earnings release. With that, I'd like to turn the call over to Matt. Matthew Hawkins: Thank you, Edward, and good afternoon, everyone. Thank you for joining our Q2 2026 earnings call. We delivered another solid quarter as we executed our strategy, supported our clients and advanced the Waystar platform toward a more autonomous revenue cycle. During the quarter, we delivered revenue of $320 million, representing 18% year-over-year growth and adjusted EBITDA of $137 million, resulting in an adjusted EBITDA margin of 43%, which exceeded consensus expectations for the quarter. We also delivered another strong quarter of bookings, supported by ongoing momentum with larger provider organizations, expansion across our client base and sustained demand for Waystar's AI-powered solutions. While the operating environment continues to evolve, the breadth of our platform, the diversity of our client base and the mission-critical nature of our solutions support healthy demand across the business. At Waystar, our focus is to help providers lower the cost to collect, accelerate reimbursement and improve payment accuracy across the revenue cycle. In Q2, we saw healthy demand across the business, ongoing client expansion and broader adoption of Waystar solutions. Large platform deployments drove strong bookings during the quarter, including a double-digit number of $1 million-plus ACV bookings, reinforcing the trend we have discussed over the past several quarters and our view that providers increasingly value a connected platform approach. Larger client relationships also continue to grow. Clients generating more than $100,000 of trailing 12-month revenue grew to 1,453, up 15% year-over-year. Within this cohort, clients have expanded their use of Waystar solutions over the past several years, demonstrating the compounding value clients realize as they adopt additional Waystar capabilities over time. Net revenue retention was 108%, within our historical range, demonstrating continued expansion within our existing client base. At the same time, new clients are increasingly selecting multiple Waystar solutions as part of their initial purchase decision. Platform consolidation continues to accelerate as providers move away from fragmented point solutions in favor of a single connected software platform. KLAS Research's inaugural revenue cycle management suites report reflects that shift. Among providers using multiple solutions from a single vendor, the study found that Waystar clients reported some of the strongest improvements in collections performance and cost to collect, providing independent validation of the operational and financial benefits providers can achieve when more of the revenue cycle is managed on a single platform. One of our $1 million-plus ACV bookings is a nonprofit health system serving Central New Jersey and Southeastern Pennsylvania. The win reflects the value of Waystar's platform with the provider selecting Waystar to replace three separate vendors across claims management, patient financial care, clinical documentation integrity and revenue capture. We also continue to see existing clients expand their relationships with Waystar. This quarter, one of the largest nonprofit health systems in the country began implementing an expanded partnership across eligibility verification and insurance coverage detection. Already a 7-figure Waystar client, the added solutions are expected to generate more than $1 million in incremental annual revenue, reinforcing the advantage of a single connected platform over a patchwork of point solutions. Another established client and multibillion-dollar academic health system with more than 3,000 beds and 9,000 physicians also recently went live with additional Waystar Altitude AI capabilities designed to prevent denials as part of its strategy to centralize revenue cycle operations. The go-live increases the client's annual investment in Waystar by an incremental 7 figures while helping lower its cost to collect, reduce manual follow-up and operate more efficiently at enterprise scale. During the quarter, we also saw encouraging adoption of Iodine solutions within the existing Waystar client base. More than $6 million of bookings came from existing Waystar clients purchasing Iodine capabilities, an early proof point of our expanding cross-sell opportunity as clients bring together financial and clinical data to improve outcomes. As coverage dynamics evolve and self-pay populations grow, providers need stronger capabilities to identify available coverage and protect reimbursement. In a newly published success story, ProMedica, a hospital and physician network serving 4.7 million patients annually, leveraged Waystar's patient insurance coverage solution to uncover nearly $10 million in previously unidentified billing opportunities that may have otherwise been missed. This quarter, we published an in-depth analysis of data from hundreds of hospitals using Waystar's clinical integrity and revenue capture capabilities. The analysis showed clients experienced outsized returns, including 3x greater financial impact from integrated clinical documentation workflows, generating $2.17 million in incremental reimbursement for 10,000 discharges and a 90% year-over-year increase in rebuild dollars caught by our revenue leakage protection capabilities. Collectively, these examples demonstrate the value of the Waystar platform. As clients adopt more capabilities, they reduce complexity, improve performance and drive stronger financial outcomes. The momentum we're seeing across the business reflects more than strong execution, it reflects the position Waystar occupies within the health care payment ecosystem and the advantages that position creates for our clients. Waystar sits at the center of the health care payment ecosystem, connecting providers and payers through critical workflows that span the payment life cycle from authorization and claim submission through adjudication, payment and reimbursement. Providers see their workflows, payers see their workflows. Waystar connects and acts autonomously across both. Operating at that intersection gives us insight into the interactions, dependencies and friction points between providers and payers. That perspective enables us to improve performance across the revenue cycle and deliver better payment outcomes. Every transaction provides intelligence about how payments move through the system. As payer requirements change, Waystar helps identify friction, adapt quickly and continuously improve performance across the network. The result is stronger operational and financial performance for clients, including faster payment decisions, accelerated time to payment, fewer errors and less rework across the revenue cycle. Waystar processes more than 7.5 billion transactions annually. The scale of that network creates a unique combination of connectivity, data, workflow intelligence and payment intelligence that strengthens the value of the platform, supports innovation across the business and increasingly enables the application of AI across the revenue cycle. These advantages are reinforced by the 4 structural foundations you've heard me discuss previously, mission-critical infrastructure, proprietary data and extensively deployed network and deep domain expertise. We believe these advantages contribute to the strong win rates we achieve and support our ability to compete successfully against point solutions, broader software platforms, end-to-end service providers and newer market entrants. Taken together, these strengths create a durable advantage that is difficult to replicate and increasingly valuable as providers look to reduce administrative burden, improve efficiency and drive better financial outcomes. As we've discussed over the last several quarters, we continue advancing our vision of creating the industry's first autonomous revenue cycle. Our goal is not simply to deploy AI, it is to orchestrate the right AI at the right moment across the revenue cycle to reduce administrative burden, improve performance and deliver better outcomes for providers. Our AI deployment is not experimental. It is embedded and monetized, and it delivers meaningful outcomes inside the mission-critical workflows our clients rely on every day. External recognition during the quarter provided additional validation of these efforts with Waystar named to the TIME100 Most Influential Companies list and earning the Time Impact in AI award. More than a dozen clients have committed to our next-generation anomaly detection solution during the first half of the year. This solution represents an important step forward because it combines Iodine's clinical documentation capabilities with Waystar's revenue capture engine. We are encouraged by the interest it is generating from large hospitals and health systems. Early adopters are seeing approximately $3 million in incremental revenue recovered per 10,000 admissions through automated revenue leakage detection. We are also seeing promising results from our newest Waystar Altitude AI-powered solution focused on payer takebacks. U.S. Renal Care, a dialysis provider with more than 500 centers across 32 states, achieved an 88% autonomous match rate between recoupments and original claims, reducing the time spent managing recruitments by approximately 80%. As we look ahead, we are focused on the same priorities that have guided us over the last several quarters, simplifying health care payments, driving innovation and delivering meaningful value for our clients, our team members and our shareholders. The fundamentals of the business are strong, client partnerships are healthy and our long-term opportunity is significant. We look forward to sharing more about our strategy, client adoption trends and long-term vision at the Investor Day in August. Before I turn the call over to Steve, I want to take a moment to recognize him and thank him for everything he has done for Waystar. As we announced earlier today, Steve will be transitioning from the Chief Financial Officer role after 8 years with the company. Steve has been a tremendous leader, trusted adviser and great friend. He has played a critical role in helping build Waystar into the company we are today, helping us scale the business, build a world-class finance organization, navigate our IPO and establish the strong financial foundation that supports our continued growth today. More importantly, Steve has been an invaluable partner to me and our leadership team. His judgment, integrity and steady leadership have had a lasting impact on this company, and we are all better because of his contributions. While Steve will be transitioning from the CFO role, he will remain with Waystar as an adviser over the coming months to help ensure a smooth transition. We are pleased to welcome Alpana Wegner, who joined Waystar this week as our next CFO. Alpana brings extensive public company finance and software industry leadership experience, having served as CFO at several public software companies and held a variety of senior finance and operating leadership roles throughout her career. I look forward to introducing her to you in the coming weeks. Steve, thank you again. You've been a great partner and a great friend. On behalf of all of us at Waystar, thank you for your leadership, your friendship and everything you've done for this company. We wish you and your family the very best. With that, I'll turn it over to you. Steven Oreskovich: Thanks, Matt, and thank you for the kind words. Serving as CFO of Waystar over the past 8 years has been one of the greatest privileges of my professional career. I've had the opportunity to work alongside an exceptional team, support incredible clients and be part of a remarkable journey. I'm incredibly proud of what we've built together and even more confident in where the company is headed. I want to thank our team members, clients, shareholders and the many friends I've made along the way for their trust, support and partnership. I'm grateful for the opportunity to have been part of this team and this company. And with that, let me turn to the quarter. Revenue increased 18% year-over-year in the second quarter to $320 million and organic revenue grew 7% year-over-year. Excluding previously discussed items affecting comparability, normalized organic growth was approximately 10% in the quarter. Performance in the quarter reflects expansion across the client base, healthy adoption of high-value solutions and continued strong execution. Total booking value and expected margin composition again exceeded internal expectations. Bookings also include a double-digit count of $1 million-plus annual contract value engagements with activity continuing to skew towards larger platform deployments and new solutions such as the pre-bill demand Matt discussed. Clients generating more than $100,000 of revenue in the last 12 months increased by 20 in the second quarter to 1,453 at quarter end, an increase of 15% year-over-year. Our net revenue retention rate also viewed on a last 12-month basis was 108% at the end of Q2, within our historical range of 108% to 110%. Subscription revenue of $176 million for the second quarter increased 34% year-over-year, 2% sequentially and was 55% of total revenue. On an organic basis, subscription revenue grew 12% year-over-year, continuing to grow at a double-digit rate and reinforcing the health of the core Waystar business. Volume-based revenue of $142 million for the second quarter increased 3% year-over-year and 2% sequentially. Please recall the items impacting second quarter year-over-year comparability are volume-based. We are pleased that both subscription and volume-based revenue performance aligned with expectations indicated on our prior earnings call. Adjusted EBITDA of $137 million for the second quarter increased 21.5% year-over-year. The adjusted EBITDA margin of 43% was consistent with the prior quarter and is indicative of the scalable nature of our platform model, disciplined cost management and the favorable margin profile of the solutions driving growth across the business. Our capital position remains strong with healthy cash flows as we ended the quarter with $192 million in cash, equivalents, and short-term investments and $1.5 billion in gross debt. In May, our Board of Directors authorized a stock repurchase plan for up to $200 million. And during the second quarter, we repurchased $13 million worth of Waystar stock at an average price of $19.24 per share. Unlevered free cash flow was $64 million in the second quarter, and we converted 47% of adjusted EBITDA to unlevered free cash flow. Cash flow and the conversion ratio reflect the typical timing of estimated federal tax payments in the quarter. Additionally, capital expenditures, including capitalized software development, increased year-over-year as we continue investing in AI platform capabilities that we believe will support future growth, drive greater automation and advance our vision for the autonomous revenue cycle over time. As of June 30, net leverage was 2.5x compared to 2.7x at the end of last quarter, which aligns with our historical ability to, and cadence of, delevering and is well below our goal of running the business at or below a 3x leverage ratio. Based on our performance through the first half of 2026 and current expectations for the rest of the year, we are raising the low end of our revenue guidance range by $2 million, resulting in a revised guidance range of $1.276 billion to $1.294 billion and a midpoint of $1.285 billion, representing 17% year-over-year growth. We are also raising our adjusted EBITDA guidance to a range of $535 million to $545 million, with a midpoint of $540 million, an increase of $5 million versus prior guidance midpoint. This concludes our opening remarks. With that, we are ready for your questions. Operator, please open the call. Operator: Our first question comes from Ryan Daniels with William Blair. Ryan Daniels: Yes, Matt, a quick question for you, and congratulations to Steve on the announcement. Best wishes to you. I was hoping you could go into a little bit of detail about what you're hearing in the end market with kind of all the noise that's going on in health care with the ACA exchange lives rolling off into uninsured with Medicaid lives going down with OBRA likely to continue to push that down. I guess the question is, what are you seeing in regards to transaction volume or patient pay because of that? And then what are you hearing from your customers about demand for different solutions to help them combat some of those changes in the market? Matthew Hawkins: Thank you, Ryan. I appreciate your thoughtful question and your well wishes for Steve. We are seeing the demand environment return to -- from a transaction utilization perspective, return to the long-term average of kind of that 1% to 2%. We know that the long-term secular trend is that 1% to 2%. In recent years, it's been higher based on probably a little bit of COVID catch-up maybe higher 3% or 4%. There are some trends that you rightly highlighted, whether it's a little bit of regulatory uncertainty around certain uninsured populations or things like that, the decrease in Medicaid lives covered that does create uninsurance. That really does create demand for Waystar solutions. When you think about what providers are most focused on, it is lowering the cost to collect, optimizing payment yield, whether from an insurance reimbursement or from a patient and reducing time to collect. We know that they want to use a platform approach versus a point solution because there's this point solution fatigue where many of them are using well over a dozen point solutions in a patchwork way to try to figure out how they can optimize their collections and address their patient population. And we think that, that is -- that setup is squarely within the line of what the value proposition is for Waystar solutions. We know that our solutions are mission-critical that they could be very helpful to providers in addressing the utilization environment, helping them do more with less, helping them have optionality to address the self-pay population or the uninsured population with many of the software modules and capabilities that we have on Waystar's platform and certainly to continue to optimize and detect coverage where a patient may be eligible for coverage, our solutions use AI to detect that coverage. And so we think those factors all contribute to a strong demand environment that we see at Waystar and have contributed to strong bookings momentum and a robust pipeline as we address the second half of the year. Operator: Our next question comes from Michael Cherny with Leerink Partners. Michael Cherny: Maybe if I can delve a little bit on Ryan's question, thinking about the end market. As you go into RFPs and really nice to see some of these business wins, but especially now as you go in with Iodine, what is the pitch that you're making? And are you seeing any different responses either against module components or potentially embedded EHR players as you drive towards your NRR levels and other new wins that you saw in the quarter? Matthew Hawkins: Thank you, Michael. We are seeing client interest in combining clinical and financial intelligence. And that's exactly the opportunity that we saw when we acquired Iodine. We know that in doing so, what we're doing is effectively reaching further upstream into the clinical workflows and beginning there, working to prevent denials from occurring in the first place, which really helps providers, working to detect anomalies where as they begin to form a claim, we want that claim to be highly accurate. So we're deploying AI to help them. We've seen some really nice wins, as we called out in our prepared remarks in the quarter, more than $6 million of some of the pre-bill anomaly detection capabilities that really come about because now Iodine and Waystar are one company. And we see strong pipeline and momentum in that regard. And again, all of it is oriented toward what our vision was at the outset of acquiring Iodine, which was to use Iodine as the AI engine to help form new solutions that are AI-based that can thematically prevent denials from occurring and create that perfect undeniable claim that will lead to accurate and timely payment. So we do like the setup, and we feel good about the strategy, believe it's intact. Operator: Our next question comes from Steven Valiquette with Mizuho Securities. Steven Valiquette: Just kind of a high-level question. Just kind of curious about just overall RCM platform approach. Obviously, now you have Iodine with CDI software. A lot of vendors sell medical coding software and CDI together. Just curious about your appetite for other vertical solutions within RCM to kind of round things out? And does medical coding software make sense tied into CDI? Matthew Hawkins: Thanks, Steven. We're absolutely focused on building toward the robust autonomous revenue cycle solution. And again, the acquisition and the strategic logic of why Iodine is very much a part of that vision because we're uniting the front end of our platform with the middle part, that perfect puzzle piece that you've heard me describe in quarters past with the back-end clearinghouse capabilities, which, as you all know, the clearinghouse is the heart and soul of the revenue cycle because that's where all the things that you do building up to payment, that's where the action -- the rubber hits the road, so to speak, and where the action occurs. And so really, our platform is a system of action, and it's driving real benefit. Within the mid-cycle, you highlight some important things that we believe that we have the right to do or the right to partner with others in the space. So on the one end of the clinical documentation improvement capability where, again, Iodine is deploying over 150 AI models and delivering more and more all the time. There is the ambient listening category. We know those players and there's opportunity for us to partner there. On the other end, you highlighted coding. And in particular, there's the autonomous coding category or the auto coding category. With all the work that we're doing, we believe that we have the right to explore that area and expand our addressable market opportunity. We certainly are studying that space carefully, and I won't say more than that at this point in time. But again, when you look long term at what we're building toward, envision this autonomously acting revenue cycle platform where a lot of work is shifting from automated work to orchestrated work by agents acting on behalf of revenue cycle experts to create that perfect round-the-clock behaving solution that benefits providers and creates a highly informed patient who can engage in their financial responsibility where we seek payments as well. That's where we're headed. And I hope my answer helps address some of the ways we're thinking about added opportunity in the middle part of the revenue cycle. Operator: Our next question comes from Scott Schoenhaus with KeyBanc. Scott Schoenhaus: So you noted the strength in the large provider clients and you talked about bookings. I'm just wondering on the RFP process specifically and the pipeline there. Are you seeing more large provider clients this year versus last year in your RFP process? And what are they coming specifically for? Is Iodine like the lead catalyst for that? I'm just trying to get a better sense of the RFP process given all the concern around large hospital systems contemplating whether in-house or other third-party AI platforms here. Matthew Hawkins: Yes. Thank you, Scott. We are seeing an uptick in RFPs, and we're participating in more RFPs, and that is leading to the types of strong bookings results that we see. And because these are larger wins, recent wins and as we look ahead in our robust pipeline, there are RFP activities going on within our bookings pipeline, these -- some of these are taking slightly longer to implement. And it's not just one solution. It's multiple solutions, front, middle or back and often all. And so that's thrilling for us to be able to participate in those things. We're creating delighted clients as we take them live. And when I step back, Scott, this is what we were alluding to all the way back in 2024 when we were working to rapidly address not only the Phase 1, as you may have heard me talk about it, clients that needed rescuing when a competitor of ours was cyberattacked and their network was taken down. But we alluded to a Phase 2, what we thought was going to be a longer tail of Phase 2. We didn't know how to time box it at the time. We didn't know how big it was going to be, but we had a sense that this was going to be a longer Phase 2. We're living in that now. And we have seen an uptick. Some of that uptick has already resulted in bookings, but we don't see that diminishing. And we believe that Waystar is well positioned to continue to participate and to win given the strength of our win rates. I'd highlight in our prepared remarks that class report that named us a top platform solution. It's an inaugural report in this topic. We were thrilled with that. And I think that's an evidence point for how we're positioning Waystar to be successful in this exciting Phase 2 that you've heard us talk about. Operator: Our next question comes from Brian Peterson with Raymond James. Brian Peterson: Congrats on the strong bookings. So I wanted to unpack the transaction component a bit. And how did that trend versus your internal expectations in the quarter? It looks like the patient volume was up a bit, but the provider was down. Is there anything that you can share that gives us more context on that? Steven Oreskovich: Yes. Thanks, Brian. This is Steve. I'll take that. So I'd say for the quarter, the patient utilization aligns with both our expectations and with overall guidance for the year. And as Matt alluded to earlier, it's in line with what we've seen from a long-term historical annual uplift year-over-year, recognizing that we're looking at a tough comp when we're looking at '26 versus '25 because those -- that utilization was elevated in '25. To your question, and I'll probably specify a little more on the volume-based revenue. We talked about that in the past being about 45% of revenue, $142 million in the quarter. That is up 3% year-over-year. If you were to normalize the items that we talked about that on prior calls, whether they were specific to '25 or earlier in '26, that volume-based revenue on a normalized basis is more like 8% year-over-year. So we feel really good about, again, where it is for the quarter and then where we've seen it so far year-to-date versus our expectations from a guidance perspective, recognizing that it is in line with the long-term historical trends versus what we've experienced or seen in the last couple of years. Matthew Hawkins: Yes. I mean I'd say, Brian, really quickly adding on to what Steve just highlighted. Speaking specifically, we called out those three large client implementations a year ago in '25 that we were able to take live on a very compressed time line. And as we noted then, they were larger and the nature of the agreements we had with them were transactional volume based. And so that's part of what leads to the year-over-year comp that optically looks the way it does. But we feel good about the volume-based aspect of our business and the growth opportunity there. Operator: Our next question comes from Brian Tanquilut with Jefferies. Brian Tanquilut: Steve, and good luck with the move. So maybe just my question, as I think about guidance and the move on the EBITDA range, you beat by $7 million in Q1, $6 million in Q2 roughly. Just curious, is there anything we should be thinking about in the back half of the year that's kind of preventing you from guiding at least by the beats that you've seen this year? Matthew Hawkins: Brian, thank you. So first, we're pleased with the performance of the business. This is the ninth consecutive quarter of beating analysts' expectations and consensus on both revenue and EBITDA. We have confidence in our full year outlook. And what I'd say is that a couple of thoughts on EBITDA production in particular. We have a number of internal initiatives that you've heard us talk about in the past. Some of those are AI operating leverage type initiatives that create improvement in gross margin, which I think you see show up in our P&L, also continued expansion of our adjusted EBITDA margin as noted in the quarter. We're balancing that with the tremendous opportunity we see to continue to invest for the long-term growth of the business. And that is additional growth investments in AI and continuing to position Waystar to be the category leader of this AI-first autonomous revenue cycle platform. So we are certainly confident in our full year guide on revenue and EBITDA, but we want to reserve a little bit of room for us to invest as appropriate. And by the way, we think that the 40-plus percent adjusted EBITDA margins that we're delivering are great because it is putting us in a strong capital position as you see us driving free cash flow. Steve, would you highlight anything incrementally? Steven Oreskovich: Yes. Just to tie out what Matt just said, as you look through the entirety of the financials, Brian, I just -- and you saw it in my prepared remarks call out the capital software spend where it's capitalized software spend where it ties directly into what Matt said about how we're focused on driving new solutions and implementing and inserting AI into our existing platform to round out the capabilities and drive an already impressive ROI for our clients even higher. If you looked at the capitalized software spend in the first half of the year, you'd see us roughly double what it was in 2025. And that is a reflection of how we're investing, as Matt said, into the products today to drive revenue growth for the future. And I'd say we're doing it in a very thoughtful manner as well as you could see that from the unlevered free cash flow conversion of adjusted EBITDA being 47% in the quarter. I mentioned a couple of other items out there, but we're looking to invest in and spend it in prudent manners. And to Matt's point, just to circle back to it, we would expect some of that to be flowing through to the P&L in the second half of the year. And really, as we look at the full year guide of 42% adjusted EBITDA margin, I think that's phenomenal based upon how we're looking to invest for the future while being stewards of the business today. Operator: Our next question comes from Elizabeth Anderson with Evercore ISI. Ayush Vyas: This is Ayush on for Elizabeth. You talked about the 6- to 18-month lead time for larger bookings a couple of quarters ago. And as you scale this number of $1 million contracts, as you kind of mentioned in the prepared remarks, are you seeing that range tighten closer to like 0 to 12 months now? Or is 6 to 18 months sort of the right way to still think about it? Thanks, Ayushan (sic) [ Ayush ] and give Elizabeth our best. We -- I'd say it's that 6 to 18 months is still generally how we're thinking about it. There's -- we're certainly working to pull that in as tight as we can. We see once in a while people moving much faster, and we're always grateful for that as we position ourselves to win. But most often, it's a very deliberate, thoughtful process that provider decision-makers go through and it tends to be that 6 to 18 months, especially for the larger deals that -- where we've highlighted some examples. The good news is we have a robust growth team. We have a proven track record in how we go and discover opportunities in accounts. We're able to sell the full platform and -- but we're also able to go to where the clients need help the most. And so sometimes the variability there is if the client wants help or the prospect wants help in one particular area, that might be more 6 to 9 to 12 months. If they want the full platform or multiple solutions on the platform, like what we're seeing, that the traditional average for us of 6 to 18 tends to hold true. So it's a proven method, and we're always working to compress it because we know the benefits of doing so on our P&L, but we've got a great team pursuing it. Operator: Our next question comes from Ryan Halsted with RBC Capital Markets. Ryan Halsted: I thought maybe you could comment just on the NRR, which has been kind of steadily stepping down. Appreciating kind of all the color you've offered so far on the business. It would be helpful just to kind of hear it in the context of NRR in terms of the moving parts. Should we be reading into it some impact of the volume-based business? Or is it sort of a lack of upsell? Or is there even some attrition? Any sort of color on the inputs that go into the NRR would be helpful. Steven Oreskovich: Yes, certainly, Ryan. This is Steve. So first off, I'd say we view the NRR, the LTM view of 108 for this quarter is very healthy and in alignment with our long-term historical sort of NRR rate. We've talked about before, and obviously, there's a slide that we include in our investor deck that shows the bridge from gross revenue retention to NRR. And if you look at those components, gross revenue retention continues to remain very strong at 97% sort of the trend that you're noticing is a factor primarily of two things. One is the clients and the time to rapid revenue that Matt had mentioned earlier, how they benefited NRR for the quarterly period, I think, around Q2 of '25 through Q1 of '26. So that added to what historically we had seen. And then the fact that we had higher utilization rates through the middle to about the, I'll call it, midway through the second half of 2025 also had a positive benefit and impact on that. So if you look at that slide, again, in our IR deck, you'd see that historically, it's been about $108 million to $110 million and the components that lead from gross to net are all in about those same ranges that are indicated on that slide. So very comfortable with the 108. And I wouldn't read more into it than we've just had some tailwind items the past few quarters that have allowed it to be beneficial and above that historical 108 to 110 range. Operator: Our next question comes from Richard Close with Canaccord Genuity. Richard Close: Steve, I enjoyed working with you over the last several years. With respect to -- you have a strong partnership with Google on the AI front. I'm just, Steve, curious maybe what you're seeing in terms of cost to compute as AI is integrated into your platform and how that gets baked into your guidance, how you think about cost of compute? Steven Oreskovich: Yes. Thanks, Richard, for the kind words. And I'd say as Matt talked earlier on the call about the internal initiatives that we have that are always ongoing that are looking to add scalability to our overall operating profile. One of the things that we know that -- and the reinvestment areas that we've talked about previously, one of those areas that we know we will utilize from the benefits of those operational activities is to cover things like cost to compute without impacting our overall margin profile. And you could probably see that in the first couple of quarters here with not only a calculable gross margin remaining at about 70%, which is in line with where we were in the back half of '25, but the overall adjusted EBITDA margin as well as we look all the way through the P&L. So I think we feel really good about how we set the contracts with Google and sort of the cost structure that we have in with that without going into too much detail and feel like the other areas where we would expect cost of compute just to normally and appropriately increase as we continue to sell more and more AI and AI solutions or AI-enabled solutions into our client base, we feel very good about the other areas that we have ongoing that will allow us to absorb those for lack of a better phrasing. Matt, anything else you'd add to that? Matthew Hawkins: Yes. I'd add a couple of things. Thanks, Steve. So first, token expense is all the rage in the broader market discussion isn't it? It is. And people are worried about the use or consumption of tokens and trying to manage and govern those broadly. And it's interesting to follow the broader industry conversation, which I'm sure you're all following. What we do at Waystar, we have an internal governance model, an AI governance approach that really could be exportable, and we could help our clients manage the way they think about AI. As we create this operating system approach for the autonomous revenue cycle, we expect to deliver foundation model capability, agentic capability while carefully and thoughtfully managing token expense and use of foundation model expense on behalf of the clients that we serve. We've got a unique approach. I appreciate you highlighting the relationship that we have with Google. It's a very constructive relationship. Again, we like the fact that they're a hyperscaler and doing some very progressive things. We're getting the benefit of that as our teams are spending time co-developing on site together, and there's some really breakthrough things that we're focused on. But amongst those is the importance of getting a grasp on governing the use of those models. So while we've trained 100% of our internal team and given 100% of our internal team access to various foundation models to do real work, we're also taking approach thoughtfully to how to govern expense internally and also on behalf of the clients. And I think we'll see a steady long-term view that we can do so effectively. Operator: Our next question comes from George Hill with DB. George Hill: I've got kind of two quick ones. I guess, Steve, can you talk about, given the slowdown in the volume-based growth, kind of what's embedded in the guidance for the back half of the year? And if that's like a number that continues to grow in the 3% range or if we should expect to see a continued deceleration there? And then my other kind of follow-up is like, can you talk a little bit where the leverage in the model is coming in because the revenue guide for the year is up modestly, while the EBITDA guide is up significantly more than the revenue guide. Like -- so I say -- so from a margin perspective, like that math doesn't perfectly math. But like clearly, there's costs coming out faster than revenues rolling on. Or would just kind of love to understand the dynamics between the revenue guide and the increase in the EBITDA. Steven Oreskovich: Yes, certainly, George. Just a couple of things. As you think about volume-based revenue for the rest of the year, the baseline for that is patient utilization of the health care system. And we talked our original guidance was for the impact for us, which is generally about a 1% to 2% uplift annually year-over-year. That was our expectation going into the year. That expectation hasn't changed. If you think about the 3% year-over-year increase on the volume-based side for the second quarter, I'd ask you to think about it in terms of the guidance for the full year, that normalized organic rate of 8% that I mentioned earlier in the call. So if you're looking at sort of how to impact that from a year-over-year perspective. And then I'd say, as you think about -- and your question about the revenue range and the uplift in the midpoint of guidance of $1 million versus the adjusted EBITDA uplift at the midpoint of range in guidance of $5 million is a factor of a couple of things. It's a reflection of where we've run the business for the first half of the year and specifically from an adjusted EBITDA perspective there at 43%. While we still expect 42% for the full year, partially want to be able to recognize that we've run the business a little above our full year expectation at the beginning of the year. And Matt and I talked about a little earlier on the call, just as a reminder, the areas of where we're looking to invest in AI and how we expect that to impact the back half of the year. The other piece of that is we've made the comments not only on this call, but in the last call in our prepared comments about the revenue mix and how we continue to see the revenue and the -- sorry, the bookings and then how it's translating into revenue from higher-margin deals. And it's a reflection of that factor as well that we continue to see the margin profile from the bookings side of things and how some of those are of the shorter time line being reflected in the P&L and feel really good about that factor as well. And obviously, that's good for the business that gives us additional ability to look at how we want to utilize those funds investing in or otherwise throughout the business. Operator: Our next question comes from Allen Lutz with Bank of America. Allen Lutz: First, Steve, it was great working with you. Best wishes moving forward. I have two questions in one here. Last quarter, AI was 40% of bookings. I don't know if you provided what it was this quarter, but if you are going to provide it, can you let us know what that was? And then, Steve, as we think about the level of capitalized software, as you talked about earlier on the call, it's gone up over the past year and over the past couple of quarters. Can you talk about this level of capitalized software? Is this the right run rate? And then as you think about the duration of the higher capitalized software spend, is there any time frame that you can give for us there? Steven Oreskovich: Yes, certainly, Allen. I'll start with the first one. We saw, again, a very good composition and mix this quarter from a bookings perspective of AI-enabled solutions. To answer your question specifically, that was approximately 40% again in this quarter. So feel really good about where we sit, not only for the quarter, but for the year-to-date. On the capitalized software development cost front, I think that if we're looking at a very near-term run rate and our expectation through the rest of 2026, sorry, I would think that what we've seen in the first couple of quarters here in 2025 (sic) [ 2026 ] are a good indication of what we see for the rest of the year. Absent our -- we'll reserve the right, if I can use that phrase, to -- as we continue to understand where our opportunities are to rapidly bring new solutions to market and continue to differentiate ourselves versus the competition. We may go a little higher than what we've seen for the first couple of quarters from a run rate perspective. But I think we feel really good about our capabilities today and reserve the right to increase a little bit more. Obviously, keeping in tune with our -- and conscious of our unlevered free cash flow conversion rate. I don't think you'd see us do something like some of the hyperscalers have done and which would mean looking at going negative from a cash flow perspective, not at all. Matt, I don't know what else you have to add. Matthew Hawkins: I mean I would say -- it's a great question. I'd say we're working to meet this unique moment in time. We feel like we've got a great position to be a category leader to build the market's first and most robust autonomous revenue cycle platform. And so you have seen us step up our cap software spend. We're doing a number of things internally that are allowing us to accelerate the ability to deliver AI-powered solutions, models deployed to do specific work that we know based on some testing that we're doing with clients that these are things that are going to produce good outcomes. And so we -- you'll see us be disciplined, but we, at the same time, want to meet this unique moment in time, which is why we've doubled the cap software spend thus far. And we'll continue to track and report to the group. The nice setup for us is that we have a strong P&L that produces growth, compounding growth and good free cash flow conversion from strong EBITDA performance. And it gives us optionality to do the right thing for the business that will create long-term shareholder benefit and client benefit just given our position in the market. Operator: Our next question comes from Craig Hettenbach with Morgan Stanley. Craig Hettenbach: Question on just 2026 guidance. So kind of implied for the back half is roughly unchanged. Anything you would call out between Q3 and Q4? And then as you think through the larger deal sizes, some that are extending out to 18 months for ramp-up, how do you think about the visibility as you head into next year? Steven Oreskovich: Yes, Craig, this is Steve. So we would expect from a second half of the year dynamic to your question specifically on Q3 and Q4 in that portion of the volume-based business that we have that are surrounding the patient -- the collections from the patients, that's about 15% of overall revenue. It typically has a dynamic whereas those patients that are on high deductible plans meet those deductible plans, they would have slightly lower revenue in the fourth quarter versus the third quarter. We would still expect that seasonality component to exist similar to prior years. As we think about these large deals that we've talked about, the $1 million-plus signings, I think it gives us really good visibility and confidence as we look out into the future. And specifically, we've talked in the past about, and we mentioned earlier on the call about the Iodine solutions that we're seeing cross-sell from. It gives us real good encouragement and confidence in the comments we've made historically about the time to revenue from those cross-sell items and impact in 2027 and feel highly confident that, that opportunity still exists out here today as well as, obviously, the overall visibility from those $1 million-plus agreements. Matthew Hawkins: Yes, I think that's right. I mean I think '26 feels like it's about sales execution and setting up implementations. We expect revenue contribution and platform benefits to become increasingly visible through '27. And as Steve said, it does give us added confidence and conviction that the long term is performing well. Operator: And our final question comes from Charles Rhyee with TD Cowen. Charles Rhyee: Steve, nice working with you. Good luck in the future. I guess maybe I want to follow up on an earlier question that Matt and Steve, you kind of responded to. When we think about competition and obviously, the concerns are -- there's some concerns here that big health systems can leverage sort of added services from their EHR vendor who are trying to move into rev cycle. And I understand the value proposition that you guys are presenting and sort of the greater ROI that you would -- that customers can expect from deploying Waystar. But can you talk a little bit about then when you're in discussion in the pipeline, do you run into a situation where customers are saying, well, we can just try this first and then see how that goes and then we'll come back? Or is there an understanding that rev cycle being as mission-critical as it is, there's no maybe there's just not that value to try something that's maybe not as good. But just trying to understand a little bit the decision tree that clients could be going through or are going through and sort of how that fits into your discussions. Matthew Hawkins: Yes. Thanks, Charles. This is a good question for us to address. Speaking of the large EHR systems, what I'd say is revenue cycle management isn't simply an extension of the EHR. It's not a natural extension to the EHR because it's a different development cycle. It requires different connection to payers. It's a different cadence, et cetera. And I'd say the large EHR vendors, they're important partners to us. We're grateful for their partnership. We work with nearly 2,000 hospitals and many of them use these large EHR solutions. I think where we see the decision tree is -- and by the way, we haven't really noted a change in the competitive environment. So I think that's really important to establish here. The decision tree is, first and foremost, clients want outcomes. They prioritize outcomes and ROI more than they do novelty point solution and free or built-in cost. So they really want outcomes because if you don't change outcomes, then you can have a free or included solution that becomes very expensive because if your denial rate stays at 15%, that's a very expensive solution. The second point is in the prioritization or decision tree of things is not only do they want outcomes, they want to see it from one end to the other. So if you think about some of these large EHR systems like in Epic. Epic is the EHR system of record in many of these hospitals. Cerner is another one, Meditech is another one. We're grateful to work with each of them. But where they are the system of record, Waystar is the system of action. And our only focus is to build the best solutions that create the best outcomes in the revenue cycle for our clients. That's all we do. So we think that as much as you hear about an EHR-first approach, you could -- we think that there's a Waystar-first approach -- and we work well in many places with EHR systems of record where Waystar is a system of action. And we have many evidences of where we're winning and securing business where a minimum viable product or an announced solution isn't showing up in the market and achieving the goal that, that provider is looking to achieve. They're looking for benefit today, and we're giving them benefit today. So that's kind of how I'd respond to that. And again, grateful for the partners that we have. We serve over and work with -- integrate with over 500 different EHR vendors and over 200 active channel partners. And we're grateful to be that system of action and that Waystar-first approach with so many. So as we wrap up today, let me thank everybody for the time and the call, and we look forward to -- I'd like to also thank our team for helping us produce these results. We feel so grateful to serve the clients that we do, and we're grateful for your thoughtful questions today. So thanks, everybody. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Before you buy stock in Waystar, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Waystar wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Waystar (WAY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Delivered 18% revenue growth driven by strong bookings momentum and a shift toward larger platform deployments, including double-digit $1 million-plus ACV wins. Capitalized on 'point solution fatigue' as providers increasingly favor Waystar's single connected platform over fragmented legacy systems to reduce administrative burden. Leveraged the Iodine acquisition to bridge clinical and financial data, resulting in $6 million in bookings from existing clients adopting pre-bill anomaly detection capabilities. Positioned the platform as a 'system of action' that operates at the intersection of providers and payers, utilizing 7.5 billion annual transactions to train autonomous AI models. Observed a return to long-term patient utilization averages of 1% to 2%, while noting that Medicaid redeterminations and uninsured growth are driving demand for coverage detection solutions. Achieved a 43% adjusted EBITDA margin by balancing disciplined cost management with the favorable margin profile of high-value AI-enabled solutions. Raised the low end of full-year revenue guidance and increased the adjusted EBITDA midpoint to $540 million, reflecting strong first-half execution and margin resilience. Anticipates that large enterprise bookings from 2026 will increasingly contribute to revenue in 2027 due to typical 6- to 18-month implementation cycles. Doubled capitalized software development spend to accelerate the delivery of the industry's first autonomous revenue cycle, focusing on agentic AI and foundation models. Maintains a long-term net revenue retention target of 108% to 110%, viewing current levels as a return to historical norms following elevated utilization in 2025. Expects seasonal volume dynamics in Q4 as patients meet high-deductible plan limits, potentially leading to slightly lower volume-based revenue compared to Q3. Announced the transition of CFO Steven Oreskovich after 8 years, with Alpana Wegner joining as the new CFO to lead the next phase of public company growth. Authorized a $200 million stock repurchase plan, with $13 million executed in Q2 at an average price of $19.24 per share. Reported a net leverage reduction to 2.5x, well below the corporate target of 3.0x, demonstrating strong cash flow generation and debt management. Highlighted a 'Phase 2' market opportunity where large providers are seeking long-term platform stability following recent industry-wide cybersecurity disruptions at competitors. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management distinguished Waystar as a 'system of action' versus the EHR's 'system of record,' noting that RCM requires a different development cadence and payer connectivity. Argued that providers prioritize ROI and denial reduction over 'free' or bundled EHR modules, which often function as minimum viable products rather than specialized solutions. Confirmed the company is 'studying the space carefully' regarding autonomous coding as a natural extension of their clinical documentation improvement (CDI) capabilities. Emphasized the goal of creating an 'undeniable claim' by moving further upstream into clinical workflows to prevent denials before they occur. Stated that internal AI governance and operational efficiencies are expected to offset rising compute costs without impacting the 70% gross margin profile. Highlighted a co-development partnership with Google to manage foundation model expenses while deploying agentic AI across the platform.

This article first appeared on GuruFocus. Revenue: $320 million, representing 18% year-over-year growth. Organic Revenue Growth: 7% year-over-year; normalized organic growth was approximately 10%. Adjusted EBITDA: $137 million, an increase of 21.5% year-over-year. Adjusted EBITDA Margin: 43%. Subscription Revenue: $176 million, up 34% year-over-year (55% of total revenue); organic subscription revenue grew 12% year-over-year. Volume-Based Revenue: $142 million, up 3% year-over-year. Net Revenue Retention: 108%. Clients >$100k Revenue: 1,453, up 15% year-over-year. Unlevered Free Cash Flow: $64 million, with a conversion rate of 47% of adjusted EBITDA. Stock Repurchases: $13 million worth of stock repurchased at an average price of $19.24 per share. Net Leverage: 2.5 times. FY2026 Revenue Guidance: Raised to a range of $1.276 billion to $1.294 billion (midpoint of $1.285 billion, representing 17% year-over-year growth). FY2026 Adjusted EBITDA Guidance: Raised to a range of $535 million to $545 million (midpoint of $540 million). Warning! GuruFocus has detected 3 Warning Sign with WAY. Is WAY fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Waystar Holding Corp (NASDAQ:WAY) delivered strong Q2 2026 results with revenue of $320 million, up 18% year-over-year, and adjusted EBITDA of $137 million, exceeding consensus expectations. The company saw robust bookings momentum, including a double-digit number of $1 million-plus ACV deals, driven by large platform deployments and client expansion. Waystar's AI-powered solutions are gaining traction, with over a dozen clients committing to its next-generation anomaly detection solution and early adopters seeing approximately $3 million in incremental revenue recovered per 10,000 admissions. The acquisition of Iodine is proving successful, with more than $6 million in bookings from existing Waystar clients purchasing Iodine capabilities, highlighting a strong cross-sell opportunity. Waystar was named to the Time 100 Most Influential Companies list and earned the Time Impact in AI award, providing external validation of its AI strategy and market position. Net revenue retention (NRR) was 108%, at the low end of its historical range of 108% to 110%, indicating a slight deceleration in client expansion. Volume-based revenue growth was only 3% year-over-year, impacted by tough comparisons from large client implementations in the prior year and a return to long-term average utilization trends. The company faces a longer sales cycle for larger deals, with a 6- to 18-month lead time, which can delay revenue recognition from new bookings. Capitalized software development costs doubled year-over-year in the first half of 2026, reflecting increased investment in AI capabilities that may pressure near-term free cash flow conversion. The operating environment includes uncertainties such as changes in Medicaid coverage and uninsured populations, which could impact transaction volumes and provider demand. Here are the key highlights from the Waystar Holding Corp (NASDAQ:WAY) Q2 2026 earnings call, presented as Q&A pairs. Q: What are you seeing in the end market regarding transaction volume and demand for solutions, given the noise in healthcare with Medicaid lives rolling off and the uninsured population?A: Matt Hawkins (CEO): We are seeing the demand environment return to the long-term average of 1% to 2% transaction utilization growth. The decrease in Medicaid lives and the resulting uninsurance creates strong demand for Waystar solutions. Providers are focused on lowering the cost to collect and optimizing payment yield, and they prefer a platform approach over point solutions. Our solutions are mission-critical for helping providers address the self-pay population and detect coverage using AI. Q: How is the RFP process trending, especially with large provider clients? Are you seeing more RFPs this year, and is Iodine the lead catalyst?A: Matt Hawkins (CEO): We are seeing an uptick in RFPs, which is leading to strong bookings results. These are often larger wins involving multiple solutions (front, middle, and back), which take slightly longer to implement. This is the "Phase 2" we alluded to in 2024 following a competitor's cyberattack, and we don't see this momentum diminishing. Waystar is well-positioned to win given our strong win rates and recognition as a top platform solution. Q: How did the transaction volume-based revenue trend versus your internal expectations in the quarter?A: Steve Oreskovich (CFO): Patient utilization aligned with our expectations and the long-term historical trend of 1% to 2% annual uplift. Volume-based revenue was $142 million, up 3% year-over-year. However, when normalizing for previously discussed items from 2025, the normalized organic growth was approximately 8% year-over-year. We feel good about the volume-based aspect of the business. Q: You beat EBITDA expectations in Q1 and Q2. Is there anything preventing you from guiding up by the full amount of the beat for the back half of the year?A: Matt Hawkins (CEO): We are pleased with our performance and have confidence in our full-year outlook. We are balancing margin expansion with the tremendous opportunity to invest for long-term growth, particularly in AI and positioning Waystar as the category leader for the autonomous revenue cycle. We want to reserve room to invest as appropriate, while still delivering strong 40%-plus adjusted EBITDA margins. Q: As you scale the number of $1 million-plus contracts, is the 6- to 18-month lead time for larger bookings tightening?A: Matt Hawkins (CEO): The 6- to 18-month timeframe is still generally how we think about it. While we work to compress it, the process for large provider decision-makers is often deliberate. The variability depends on whether a client wants help with a single area (closer to 6-12 months) or the full platform (closer to 18 months). We have a robust growth team and a proven track record. Q: The NRR has been steadily stepping down to 108%. Should we read into this as a sign of attrition or a lack of upsell?A: Steve Oreskovich (CFO): We view the 108% NRR as very healthy and in alignment with our long-term historical range of 108% to 110%. The slight decline from recent quarters is primarily due to two factors: the lapping of rapid revenue from large client implementations in 2025 and the normalization of higher utilization rates from the second half of 2025. Gross revenue retention remains very strong at 97%. Q: Can you talk about the cost to compute as AI is integrated into your platform and how that gets baked into your guidance?A: Steve Oreskovich (CFO): We have internal initiatives focused on scalability that allow us to absorb costs like compute without impacting our overall margin profile. We feel good about our cost structure with Google and expect other areas of operational efficiency to cover the normal increase in compute costs as we sell more AI-enabled solutions. Q: What is the level of capitalized software spend, and is this the right run rate going forward?A: Steve Oreskovich (CFO): The capitalized software spend in the first half of the year is roughly double what it was in 2025. This reflects our investment in new AI-driven solutions and platform capabilities. We expect this to be a good run rate for the rest of 2026, though we reserve the right to increase it if we see opportunities to rapidly bring new solutions to market. We will remain disciplined and conscious of our free cash flow conversion. Q: How do you think about the competitive landscape, specifically regarding large health systems potentially using services from their EHR vendor?A: Matt Hawkins (CEO): Revenue cycle management is not a natural extension of the EHR; it requires different connections to payers and a different development cycle. Clients prioritize outcomes and ROI over novelty or "free" solutions. Waystar is the "system of action" while the EHR is the "system of record." We have not noted a change in the competitive environment and continue to win business where announced solutions from EHR vendors are not achieving the desired goals for providers. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Waystar Holding Corp.? Here are five stocks we like better. Strong second-quarter performance: Waystar’s revenue rose 18% year over year to $320 million, while adjusted EBITDA increased 21.5% to $137 million, maintaining a 43% margin. The company raised its 2026 revenue and adjusted EBITDA guidance. Platform adoption and AI momentum continued: Large providers signed multi-million-dollar engagements, subscription revenue grew 34%, and more than $6 million in quarterly bookings came from existing clients purchasing Iodine capabilities. Waystar is expanding AI tools aimed at preventing denials and identifying revenue leakage. Financial position and leadership transition: Waystar generated $64 million in unlevered free cash flow and reduced net leverage to 2.5 times, while repurchasing $13 million of stock. CFO Steve Oreskovich will transition to an advisory role, with Alpana Wegner becoming the company’s new CFO. Can Waystar Still Stand Up to Rising Competition? Waystar (NASDAQ:WAY) reported second-quarter 2026 revenue of $320 million, up 18% from a year earlier, and adjusted EBITDA of $137 million, representing a 43% margin. Chief Executive Officer Matt Hawkins said the company’s results reflected continued client expansion, demand for its AI-powered revenue-cycle tools and momentum in larger platform deployments. Organic revenue increased 7% year over year, while normalized organic growth was approximately 10% after excluding previously disclosed items affecting comparability, Chief Financial Officer Steve Oreskovich said. The company also raised the low end of its full-year revenue outlook and increased its adjusted EBITDA guidance. → This Tiny AI Supplier Could Be More Important Than the Chipmakers Waystar said bookings included a double-digit number of engagements with annual contract values exceeding $1 million. Hawkins said providers are increasingly seeking to consolidate fragmented revenue-cycle point solutions onto connected platforms that span functions including claims management, patient financial care, clinical documentation integrity and revenue capture. The company cited a nonprofit health system in central New Jersey and southeastern Pennsylvania that selected Waystar to replace three vendors across several workflows. It also highlighted an expanded relationship with one of the country’s largest nonprofit health systems, which is implementing Waystar’s eligibility-verification and insurance-coverage detection tools. The additional solutions are expected to generate more than $1 million in incremental annual revenue, according to Hawkins. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Clients generating more than $100,000 in trailing-12-month revenue totaled 1,453 at quarter end, up 15% year over year. Net revenue retention was 108%, within the company’s historical 108% to 110% range. Oreskovich said gross revenue retention remained strong at 97%. Subscription revenue rose 34% year over year to $176 million, or 55% of total revenue. On an organic basis, subscription revenue grew 12%. Volume-based revenue was $142 million, up 3% year over year and 2% sequentially; Oreskovich said normalized volume-based revenue growth was closer to 8% after accounting for comparison items. → Innovative ETF Strategies That Are Paying Off This Summer Waystar continued to emphasize its effort to build what Hawkins called an “autonomous revenue cycle,” using AI within provider payment workflows. The company said it processes more than 7.5 billion transactions annually and uses the resulting network, workflow and payment data to support automation and payment intelligence. More than $6 million of quarterly bookings came from existing Waystar clients purchasing Iodine capabilities, an early indicator of cross-selling opportunities following the acquisition. Hawkins said the combined clinical and financial data capabilities are intended to help providers prevent denials before claims are submitted and identify potential revenue leakage. More than a dozen clients committed to Waystar’s next-generation anomaly-detection solution during the first half of the year, according to Hawkins. The company said early adopters have recovered approximately $3 million in incremental revenue per 10,000 admissions through automated revenue-leakage detection. Waystar also cited results from U.S. Renal Care, which operates more than 500 dialysis centers across 32 states. The provider achieved an 88% autonomous match rate between recoupments and original claims using a Waystar AltitudeAI-powered payer-takeback solution, reducing time spent managing recoupments by about 80%, Hawkins said. During the question-and-answer session, Hawkins said healthcare transaction utilization has returned toward its long-term annual growth range of about 1% to 2%, after elevated growth of roughly 3% to 4% in recent years. He said declines in Medicaid coverage and growth in uninsured or self-pay populations could increase demand for tools that identify available insurance coverage, improve collection rates and lower providers’ cost to collect. Hawkins also said Waystar is seeing more requests for proposals, including larger opportunities involving multiple front-, middle- and back-office revenue-cycle solutions. He said implementation timelines for larger contracts generally remain in the six- to 18-month range, although single-solution purchases can move more quickly. Adjusted EBITDA increased 21.5% year over year, with the 43% margin unchanged from the prior quarter. Oreskovich attributed the margin performance to the company’s scalable platform model, cost discipline and a favorable mix of higher-margin bookings. Waystar generated $64 million in unlevered free cash flow during the quarter, converting 47% of adjusted EBITDA into unlevered free cash flow. The company ended June with $192 million in cash equivalents and short-term investments and $1.5 billion in gross debt. Net leverage declined to 2.5 times from 2.7 times at the end of the first quarter. The board had previously authorized up to $200 million in share repurchases. During the second quarter, Waystar repurchased $13 million of stock at an average price of $19.24 per share. The company increased its 2026 revenue guidance to $1.276 billion to $1.294 billion, lifting the low end by $2 million. The midpoint of $1.285 billion would represent 17% year-over-year growth. Adjusted EBITDA guidance was raised to $535 million to $545 million, up $5 million at the midpoint. Management said it expects to continue investing in AI platform capabilities and capitalized software development, which Oreskovich said was roughly double the prior-year level during the first half. He said the company expects such investment to continue through the remainder of 2026 while maintaining its focus on free-cash-flow generation. Waystar also announced that Oreskovich will transition out of the CFO role after eight years with the company and remain as an adviser during the coming months. Alpana Wegner joined Waystar during the week as its next CFO. Hawkins said Wegner brings public-company finance and software-industry leadership experience, including prior CFO roles at several public software companies. Waystar (NASDAQ:WAY) is a leading provider of cloud-based revenue cycle management and payment solutions for healthcare organizations. The company's unified platform streamlines the entire financial continuum of patient care, from eligibility verification and claim submission to payment reconciliation and patient billing. By automating key processes and improving claim accuracy, Waystar helps providers reduce administrative overhead, accelerate cash flow and enhance overall revenue performance. At the core of Waystar's offering is a SaaS-based architecture that integrates seamlessly with existing electronic health record (EHR) systems and payer networks. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Waystar Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Waystar Holding (WAY) came out with quarterly earnings of $0.43 per share, beating the Zacks Consensus Estimate of $0.4 per share. This compares to earnings of $0.36 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.50%. A quarter ago, it was expected that this health care payments software maker would post earnings of $0.39 per share when it actually produced earnings of $0.42, delivering a surprise of +7.69%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Waystar, which belongs to the Zacks Internet - Software industry, posted revenues of $319.67 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.12%. This compares to year-ago revenues of $270.65 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Waystar shares have lost about 27.7% since the beginning of the year versus the S&P 500's gain of 8.5%. While Waystar has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Waystar was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.41 on $321.84 million in revenues for the coming quarter and $1.65 on $1.28 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 41% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, DigitalOcean Holdings, Inc. (DOCN), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This company is expected to post quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of -55.9%. The consensus EPS estimate for the quarter has been revised 8.1% higher over the last 30 days to the current level. DigitalOcean Holdings, Inc.'s revenues are expected to be $276.15 million, up 26.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Waystar Holding Corp. (WAY) : Free Stock Analysis Report DigitalOcean Holdings, Inc. (DOCN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Q2 revenue of $319.7M, up 18% YoY Q2 net income of $40.9M and non-GAAP net income of $83.3M Q2 net income margin of 13%; adjusted EBITDA margin of 43% Raising revenue and adjusted EBITDA guidance for 2026 LEHI, Utah and LOUISVILLE, Ky., July 29, 2026 /PRNewswire/ -- Waystar Holding Corp. (Nasdaq: WAY), a provider of leading healthcare payment software, today reported results for the second quarter ended June 30, 2026. "Waystar delivered another solid quarter, driven by healthy demand, disciplined execution, and growing provider adoption," said Matt Hawkins, Chief Executive Officer of Waystar. "Our unique position connecting providers, payers, and patients — combined with the breadth of our platform, the scale of our data, and the accelerating impact of our AltitudeAI capabilities — helps clients improve performance and reinforces our confidence in the long-term opportunity ahead." Second Quarter 2026 Financial Highlights Revenue of $319.7 million, up 18% year-over-year Net income of $40.9 million, GAAP net income per diluted share of $0.21, and net income margin of 13% Non-GAAP net income of $83.3 million and non-GAAP net income per diluted share of $0.43 Adjusted EBITDA of $136.7 million and adjusted EBITDA margin of 43% Cash flow from operations of $59.4 million and unlevered free cash flow of $63.9 million Key Performance Metrics and Revenue Disaggregation 1,453 clients contributed over $100,000 in LTM revenue, up 15% year-over-year Net revenue retention rate (NRR) of 108% Second quarter 2026 subscription revenue of $176.3 million, up 34% year-over-year Second quarter 2026 volume-based revenue of $142.1 million, up 3% year-over-year Second quarter 2026 provider revenue of $231.8 million, up 23% year-over-year Second quarter 2026 patient revenue of $87.9 million, up 7% year-over-year Financial Outlook As of July 29, 2026, Waystar provides the following guidance for its full fiscal year 2026.1 Total revenue is expected to be between $1.276 billion and $1.294 billion Adjusted EBITDA is expected to be between $535 million and $545 million Non-GAAP net income is expected to be between $322 million and $340 million Diluted non-GAAP net income per share is expected to be between $1.61 and $1.70 Webcast Information Waystar's financial results will be discussed on a conference call scheduled at 4:30 p.m. Eastern Time today, July 29, 2026. A live audio conference call will be available on Waystar's website at https://investors.waystar.com/news-events/events. The webcast will be archived on the site for those unable to listen in real time. This earnings release and the related Current Report on Form 8-K furnished July 29, 2026, are available on the Investor Relations page of the company's website. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website. Accordingly, investors should monitor this portion of our website, in addition to following our press releases, U.S. Securities and Exchange Commission ("SEC") filings, and public conference calls and webcasts. Non-GAAP Financial Measures To supplement the consolidated financial statements prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures as defined below. We present non-GAAP financial measures as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes these non-GAAP financial measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses adjusted EBITDA and adjusted EBITDA margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures. Management uses non-GAAP net income and non-GAAP net income per share to evaluate our core operating profitability on an after-tax basis exclusive of certain non-cash and non-recurring items, and to facilitate comparison with peer companies that may have different capital structures, acquisition histories, or tax profiles. Management uses unlevered free cash flow to evaluate cash generation from our core business operations independent of our capital structure. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide. Adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per share and unlevered free cash flow are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) or net income (loss) margin as measures of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, these measures are not intended to be a measure of free cash flow available for management's discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. A reconciliation is provided below for our non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP. A quantitative reconciliation of the forward-looking non-GAAP financial measures included in our financial outlook is not provided for the reasons described under "Financial Outlook." Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. The following non-GAAP financial measures and key performance metrics are defined below: Adjusted EBITDA and adjusted EBITDA Margin We define adjusted EBITDA as net income / (loss) before interest expense, net, income tax expense / (benefit), depreciation and amortization, and as further adjusted for stock-based compensation expense, acquisition and integration costs, asset and lease impairments, costs related to amended debt agreements, IPO and secondary offering costs and costs related to other unusual, non-recurring or otherwise notable items. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue. Non-GAAP Net Income and Non-GAAP Net Income Per Share We define non-GAAP net income as GAAP net income excluding the impact of stock-based compensation, acquisition and integration costs, asset and lease impairments, costs related to our IPO, and the Secondary Offerings, costs related to amended debt agreements and amortization of intangibles, and costs related to other unusual, non-recurring or otherwise notable items. The tax effects of the adjustments are calculated using a management estimated annual effective non-GAAP tax rate of 21%, which is based on our statutory federal tax rate and provides consistency across interim reporting periods by eliminating the effects of non-recurring and period specific items. Due to the differences in the tax treatment of items excluded from non-GAAP net income, our estimate tax rate on non-GAAP net income may differ from our GAAP tax rate. Non-GAAP net income per share is shown on both a basic and diluted basis and is defined as non-GAAP net income divided by the basic or diluted weighted-average shares, respectively. Unlevered Free Cash Flow We define unlevered free cash flow as cash from operations plus cash interest paid less capital expenses. Net Debt We define net debt as the sum of the current portion of long-term debt, long-term debt, and accounts receivable securitization less cash and equivalents and investment securities. Adjusted Net Leverage Ratio We define adjusted net leverage ratio as net debt divided by adjusted EBITDA over the preceding twelve months. Gross Debt We define gross debt as the sum of the current portion of long-term debt, long-term debt, and accounts receivable securitization. Adjusted Gross Leverage Ratio We define adjusted gross leverage ratio as gross debt divided by adjusted EBITDA over the preceding twelve months. Key Performance Metrics Net Revenue Retention Rate Our Net Revenue Retention Rate compares twelve months of client invoices for our solutions at two period end dates. To calculate our Net Revenue Retention Rate, we first accumulate the total amount invoiced during the twelve months ending with the prior period-end or Prior Period Invoices. We then calculate the total amount invoiced to those same clients for the twelve months ending with the current period-end, or Current Period Invoices. Current Period Invoices are inclusive of upsell, downsell, pricing changes, clients that cancel or chose not to renew, and discontinued solutions with continuing clients. The Net Revenue Retention Rate is then calculated by dividing the Current Period Invoices by the Prior Period Invoices. Our total invoices included in the analysis are greater than 98% of reported revenue. We use Net Revenue Retention Rate to evaluate our ongoing operations and for internal planning and forecasting purposes. Acquired businesses are included in the last-twelve-month Net Revenue Retention Rate in the ninth quarter after acquisition, which is the earliest point that comparable post-acquisition invoices are available for both the current and prior twelve-month period. Customer Count with >$100,000 of Revenue We regularly monitor and review our count of clients who generate more than $100,000 of revenue. Our count of clients who generate more than $100,000 of revenue is based on an accumulation of the amounts invoiced to clients over the preceding twelve months. The invoices for acquired clients are included starting in the first full calendar quarter after the date of acquisition. Forward-Looking Statements This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current views with respect to, among other things, statements regarding Waystar's expectations relating to future operating results and financial position, including full year 2026, and future periods; the performance of our new product offerings; our industry and market opportunities, business strategy, goals, and expectations concerning our market position, future operations, margins and profitability, capital expenditures, liquidity, and capital resources and other financial and operating information. Forward-looking statements include all statements that are not historical facts. These statements may include words such as "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future," "will," "seek," "foreseeable," "outlook," the negative version of these words or similar terms and phrases to identify forward-looking statements in this press release, including the discussion of outlook for full fiscal year 2026. The forward-looking statements contained in this press release are based on management's current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, and projections will result or be achieved. The following factors are among those that may cause actual results to differ materially from the forward-looking statements: our operation in a highly competitive industry; our ability to retain our existing clients and attract new clients; our ability to successfully execute on our business strategies in order to grow; our ability to accurately assess the risks related to acquisitions and successfully integrate acquired businesses, including the acquisition of Iodine; our ability to establish and maintain strategic relationships; the growth and success of our clients and overall healthcare transaction volumes; consolidation in the healthcare industry; our selling cycle of variable length to secure new client agreements; our implementation cycle that is dependent on our clients' timing and resources; our dependence on our senior management team and certain key employees, and our ability to attract and retain highly skilled employees; the accuracy of the estimates and assumptions we use to determine the size of our total addressable market; our ability to develop and market new solutions, or enhance our existing solutions, to respond to technological changes or evolving industry standards; the interoperability, connectivity, and integration of our solutions with our clients' and their vendors' networks and infrastructures; the performance and reliability of internet, mobile, and other infrastructure; the consequences if we cannot obtain, process, use, disclose, or distribute the highly regulated data we require to provide our solutions; our reliance on certain third-party vendors and providers; any errors or malfunctions in our products and solutions; failure by our clients to obtain proper permissions or provide us with accurate and appropriate information; the potential for embezzlement, identity theft, or other similar illegal behavior by our employees or vendors, and a failure of our employees or vendors to observe quality standards or adhere to environmental, social, and governance standards; our compliance with the applicable rules of the National Automated Clearing House Association and the applicable requirements of card networks; increases in card network fees and other changes to fee arrangements; the effect of payer and provider conduct which we cannot control; privacy concerns and security breaches or incidents relating to our platform or data (including personal information and other regulated data); the complex and evolving laws and regulations regarding privacy, data protection, and cybersecurity; our ability to adequately protect and enforce our intellectual property rights; our ability to use or license data and integrate third-party technologies; the development, deployment, and use of AI; our use of "open source" software; legal proceedings initiated by third parties alleging that we are infringing or otherwise violating their intellectual property rights; claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties; the heavily regulated industry in which we conduct business; the uncertain and evolving healthcare regulatory and political framework; healthcare laws and data privacy and security laws and regulations governing our Processing of personal information (which may also be referred to as "personal data" or "personally identifiable information"); reduced revenues in response to changes to the healthcare regulatory landscape; legal, regulatory, and other proceedings that could result in adverse outcomes; contractual obligations requiring compliance with certain provisions of the Bank Secrecy Act/anti-money laundering laws and regulations; existing laws that regulate our ability to engage in certain marketing activities; our full compliance with website accessibility standards; any changes in our tax rates, the adoption of new tax legislation, or exposure to additional tax liabilities; limitations on our ability to use our net operating losses to offset future taxable income; losses due to asset impairment charges; our substantial debt and restrictive covenants in the agreements governing our Credit Facilities; interest rate fluctuations; unavailability of additional capital on acceptable terms or at all; the impact of general macroeconomic conditions; our history of net losses and our ability to achieve or maintain profitability; the interests of the certain investors may be different than the interests of other holders of our securities; and each of the other factors discussed under the heading of "Risk Factors" in the Company's 10-K filed with the Securities and Exchange Commission (the "SEC") on February 17, 2026, and in other reports filed with the SEC, all of which are available on the Investor Relations page of our website at investors.waystar.com. Any forward-looking statements made by us in this press release speak only as of the date of this press release and are expressly qualified in their entirety by the cautionary statements included in this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. You should not place undue reliance on our forward-looking statements. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by any applicable securities laws. About Waystar Waystar's mission-critical software is purpose-built to simplify healthcare payments so providers can prioritize patient care and optimize their financial performance. Waystar serves approximately 30,000 clients, representing over 1 million distinct providers, including 16 of 20 institutions on the U.S. News Best Hospitals list. Waystar's enterprise-grade platform annually processes over 7.5 billion healthcare payment transactions, including over $2.4 trillion in annual gross claims and spanning approximately 60% of U.S. patients. Waystar strives to transform healthcare payments so providers can focus on what matters most: their patients and communities. Discover the way forward at waystar.com. Media ContactKristin [email protected] Investor ContactEdward [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/waystar-reports-second-quarter-2026-results-302838195.html

The market expects Waystar Holding (WAY) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on July 29, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This health care payments software maker is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of +11.1%. Revenues are expected to be $316.13 million, up 16.8% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.83% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Waystar, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.08%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that Waystar will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Waystar would post earnings of $0.39 per share when it actually produced earnings of $0.42, delivering a surprise of +7.69%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Waystar appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Waystar Holding Corp. (WAY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research